Gabriela - Thanks for sharing your analysis. I think the Fed is going to have to decide very quickly which of these forces they consider to be of overriding importance.
U.S. industry shows signs of slowdown--Fed sources
biz.yahoo.com
>>The lingering doubt, however, was whether an expected slowdown would be enough to bring economic growth to more moderate levels and help ward off potential inflationary pressures stemming from an extremely tight U.S. labor market.
The Fed sources gave mixed answers to that question.
One said the expected Asia-induced slowdown should be enough to offset inflationary increases in labor costs due to tight labor markets.
However, the other two said they believed the overall economy remained very strong, adding that they were not sure a slowing from Asia would bring growth down to more sustainable levels of 2.0 to 2.5 percent.
''The overall economy is booming. Manufacturing aside, if you look at the last few jobs reports, these are astoundingly high numbers,'' one source said.
The other Fed official agreed, adding that ''The Asia effect, I would've thought, is much smaller than most of the press seems to be reporting.''
The three sources agreed, however, that falling energy and commodity prices should continue to keep consumer and producer inflation numbers low over the next few months.
The sources declined to comment on the future for monetary policy.<< |
